Trump Announces Major US-India Trade Deal; Reciprocal Tariffs Slashed to 18%

New Delhi, Feb 2026 : US President Donald Trump announced a significant bilateral trade agreement with India on Monday, following a phone call with Prime Minister Narendra Modi, marking a major shift in economic ties between the world’s two largest democracies. The announcement, made in a post on Trump’s Truth Social platform, said the United States will immediately reduce its reciprocal tariffs on Indian goods from 25% to 18% under the new deal, a move widely welcomed by business communities on both sides.

In his post, Trump described Modi as “one of my greatest friends” and a “powerful and respected leader,” emphasizing their wide-ranging discussion on trade, peace efforts related to the Russia-Ukraine conflict, and other global issues. The announcement comes as part of broader efforts to strengthen US-India relations, which had been strained by earlier tariff disputes linked to India’s energy purchases from Russia.

Under the agreement, the US will charge a lower reciprocal tariff of 18% on all Indian imports, effective immediately. In return, Trump said India would move forward to reduce its tariffs and non-tariff barriers on US products to zero, aiming to create a more balanced and mutually beneficial trade environment.

The deal also reportedly includes commitments from India to adjust its energy import strategy. Trump stated that Modi agreed to stop purchasing Russian oil and instead increase imports from the United States and potentially Venezuela. This energy component is seen as a significant aspect of the agreement, reflecting strategic economic cooperation in addition to trade liberalization.

The announcement further highlighted India’s commitment to “Buy American” at a higher level, with discussions pointing to substantial Indian purchases of American energy, technology, agricultural products, coal, and other goods. While specific figures have not been fully confirmed by official Indian sources, Trump referenced figures suggesting commitments that could reach hundreds of billions of dollars in US exports to India.

Prime Minister Modi responded warmly to the development, thanking Trump on social media for the tariff reduction and underscoring the importance of cooperation between the two nations. Modi said that the move would benefit Indian exporters, particularly in sectors like textiles, gems and jewelry, by making Indian products more competitive in the US market.

Analysts say this agreement not only reduces trade frictions but also signals a diplomatic rapprochement after months of negotiations and previously rising tariff tensions. The deal follows preceding trade discussions and aligns with broader efforts by both governments to deepen economic ties and enhance strategic cooperation. While technical and legal details remain to be finalized, the immediate reduction in reciprocal tariffs is being viewed as a major boost to bilateral trade relations.

The deal could have far-reaching implications for global trade patterns, potentially strengthening economic linkages between India and the United States while influencing how other major economies engage with both partners in future trade negotiations.